How do I rent out a room in my Melbourne home legally?

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Renting out a room in your Melbourne home is a straightforward process if you follow the correct steps — but skipping any of them exposes you to significant legal and financial risk.

Step 1 — Check your ownership or lease conditions:

Homeowners: Check your mortgage conditions — some lenders restrict rental without approval
Main tenants (subletting): Your lease must permit subletting, or you must obtain written permission from your landlord before advertising

Step 2 — Understand your legal obligations as a rental provider: Under the Residential Tenancies Act 1997, even renting a single room makes you a "rental provider" with legal obligations:

Provide a written tenancy agreement (the standard Victorian form)
Lodge the bond with the RTBA within 10 business days
Provide a completed condition report at the start of the tenancy
Ensure the property meets minimum rental standards
Give the tenant a copy of the Consumer Affairs Victoria Renters Guide

Step 3 — Set the rent: Research comparable active listings in your suburb by room size, furnishing and transport access. Overpricing in Melbourne's share house market leads to extended vacancy — even a week of vacancy on a $300/week room costs you $300.

Step 4 — Screen tenants properly: You can ask for: proof of income or employment, a reference from a previous landlord, and identification. You cannot ask for: tax file numbers, social media login credentials or more than one form of photo ID.

Step 5 — Draft the agreement: Use the standard Victorian residential tenancy agreement available from Consumer Affairs Victoria — this is legally compliant and protects both parties.